More than half of Florida homeowners in foreclosure have not made a mortgage payment in two years or more. That’s higher than the national average and one indication of why banks are paying borrowers up to $20,000 to process a short sale instead.
56 percent of Florida’s mortgages in foreclosure are 24 months or more behind in payments, compared with 39 percent nationwide.
About 84 percent of Florida foreclosures are more than 18 months in arrears.
In January 2010, just 19 percent of Florida’s foreclosures were 24 months or more delinquent.
The longer delinquency rates are more evidence of a foreclosure bottleneck that could hinder a housing recovery.
Florida’s courts are mired in an estimated 350,000 foreclosures. Cases continue to be delayed as lenders and bank lawyers sort through last fall’s robo-signing scandal.
The lengthy delays could be a boon for some struggling borrowers as banks look for alternatives to languishing in foreclosure court, said Jack McCabe, chief executive of McCabe Research & Consulting in Deerfield Beach.
Last month, Bank of America quietly began a Florida-only campaign that gives homeowners up to $20,000 for a short sale rather than letting their homes linger.
Wells Fargo and J.P. Morgan Chase have similar short-sale programs, sometimes called “cash for keys.” McCabe said a woman he knows was told by Chase it would give her $35,000 for a short sale after she was only 60 days behind on payments.
Banks are finally starting to see that foreclosures are a very long, dragged-out process and it’s to their advantage to do a short sale They don’t want to incur the expense of a vacant home. They’re cutting their losses.